Inflation data and the Fed's meeting minutes could be two big drivers for the markets today. So far, stocks look weak-to-flat ahead of the opening after yesterday's late-day rise to yet another record level. Hewlett-Packard is trading lower in Europe after reporting earnings after the bell yesterday. Wall Street is apparently unhappy with its outlook, after its report of a 26% rise in profits on strong printer and PC sales.
The Dow rose a modest 19 points yesterday to set its 31st record since October, and the S&P 500 finished yesterday at a 6-1/2 year high. The Nasdaq finished at a six year high, and the Dow Transports and Utilities set new records. Oil prices continue to cooperate with equity markets, starting the day weaker after a more than 2% drop yesterday.
The Bank of Japan raised interest rates a quarter point to 0.5%, its first move since July. The yen slid, however, after strengthening ahead of the news, but the Topix index moved up to a 15-year high after the decision. Economists expect the BOJ to move very slowly with future rate hikes.
Is Inflation Dead?
The CPI, measure of consumer level inflation is due at 8:30 am New York time. Our Steve Liesman will report on the number today and "Morning Call" will take a look at whether inflation is still a factor for markets to fear. Remember, Fed chairman Ben Bernanke suggested the Fed was doing well with inflation in his comments to Congress last week. But still, we expect to see those Fed meeting minutes this afternoon to show a neutral Fed view.
Google vs. TV
The Wall Street Journal takes a look at how Google's ownership of YouTube is not helping its relationship with the television industry which objects to unauthorized content seeping onto YouTube. Google's is having a difficult time as it tries to find TV partners.
Health Care vs. the Economy
The Journal also takes a look at a new study that shows the U.S. government is picking up an even bigger percent of the nation's health care bill as costs rise. The article, based on a study in the journal Health Affairs, and was conducted by government economists working for the agency that runs Medicare. They expect health care costs to double to $4.1 trillion by 2016, and the government will be picking up the tab for 48.7%, from 45%. We will look more at this trend today.
JetBlue gets a lift from Merrill Lynch today, which raised it to "buy" from "neutral," but the hard-hit airline also said this morning that delays caused by weather would hurt first-quarter earnings, with operating margins between -2% and -4% for the period.
Motorola was downgraded at Lehman.